Manufacturers seek operability of off-grid solutions to improve operating cost

Frank Jacobs, MAN President

Although energy prices moderated across the country in November based on the latest inflation report by the National Bureau of Statistics (NBS), local manufacturers have urged the Federal Government to ensure the operability of Independent Power Producers (IPP) for on/off grid power generation and the Micro Grid Initiative in order to reduce operating costs.

According to the manufacturers, encouraging the exploration of energy mix in the country as well as the re-classification of the manufacturing sector into strategic gas users from the current commercial gas users’ classification will help to improve efficiency in the real sector.

Indeed, prices of Household Kerosene (HHK), Premium Motor Spirit (PMS) and Automotive Gas Oil (diesel) declined 2.3%, 0.3% and 1.3% to ₦267.14, ₦145.60 and ₦199.26 respectively in November as a result of higher levels of product truck out reported by the Ministry of Petroleum Resources.

However, analysts suggest that the figures may change when an assessment is done for the month of December going by the round of fuel crisis occasioned by poor distribution and hoarding.

With Automotive Gas Oil (diesel) being sold at N200 per litre across major fuel stations, local producers hope to intensify the migration to alternative power sources.

President of the Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs while speaking on the association’s outlook for 2018, said operators want government to support the efficiency of players in the power generation, transmission and distribution chain.

Already, there are indications that more manufacturers are expected to go off-grid as part of measures to reduce production costs and enhance competitiveness.

MAN is hoping to increase the number of its members on its own Independent Power Project (IPP) scheme.

The Coordinator, Manufacturers Power Development Company Limited, Oweh Mba-Sam, had told The Guardian that the company was set up by the MAN to drive the process of ensuring that members would have regular power supply for their operations.

“Over the years, the power supply from the grid has been insufficient and, sometimes, of low quality, and doesn’t come when it is needed. Sometimes, it comes when the factories have closed. Therefore, it is not serving the purpose it is supposed to serve for most of the manufacturers”.

He said the company was set to drive the process of developing power plants for the manufacturers in various clusters across the country.

Mba-Sam said, “We have sought the cooperation of the regulatory authorities and we have their support. By the end of the year, MAN should be able to inaugurate the first few plants in line with the declaration of the Minister of Power, Works and Housing for incremental power. We are not looking at big plants because they are very challenging to embark on; we are looking at small plants that can serve the clusters.”

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